A New Leaf

It's too bad the Minnesota Taxpayers Tea Parties were heldlast week instead of this. Why? Because after theHouse and Senate DFLers announce their new tax plans this week, the crowds lastweek would look like the warm up act for the gigantic group of tax protestersthat would assemble all across the state.

The DFL-led House announced their $1.5 billion dollar taxincrease plans this morning. Notto be outdone, the Senate plans on announcing their two billion dollar taxincreases tomorrow.

Individual income tax earners will pay the bulk of the newtaxes and Minnesota would have the dubious achievement of joining the top fivestates with the highest personal income tax rates. We would also abolish a whole host of popular middle-classtax benefits including the home mortgage and charitable tax deductions.

April 27^th is tax freedom day in Minnesota. That is the day that you and I willhave made enough money this year to pay our combined 2009 federal, state andlocal taxes. Minnesota has thedubious honor of being the 8^th latest state in the nation to satisfythe tax collectors. I'm guessingwith these proposed massive tax increases, we will end up in the top five state'swith the highest tax burdens.

My distress about adding to the already heavy tax burden wehave in Minnesota is easy to understand: I simply can't afford to pay any more. I'll bet many of you feel the same way right about now.

It's time to cut spending in this state and to haveeveryone, regardless of his or her income level, pay something into the system.

I say this because we are rapidly becoming a two-tieredsociety courtesy of our state and federal tax codes. My liberal friends get angry when I call our Minnesota taxsystem a socialist redistributionist plan but it is what it is. And, these new legislative tax proposalsmake it even more so.

But the best income tax deal is reserved for those who earnless than $30,500. There areapproximately 43 million Americans who fall into this income tax bracket and theypay no income tax. Instead, theyreceive income tax refunds, courtesy of their hard-working neighbors and in 2005, those refunds totaled nearly $33.3 billion.

And so today, in the middle of one of the worst recessionsour country has seen in nearly 30 years, the Minnesota DFL wants us to chip ineven more of our earnings so that there is even more money to redistribute. But with nearly 50% of all taxpayers derivingbenefits from the government for which they pay nothing towards itsmaintenance, it's pretty clear to me that we have an unsustainable taxsystem. For you see, I'm convincedthat if more people paid into the system, we'd have a lot more public scrutinyas to how our precious tax dollars are spent by our multi-levels of Minnesotagovernment.

Furthermore, many taxpayers would agree that we have anexcessive level of spending that we cannot maintain. Rather than attempting to raise taxes, we must cut statespending. Even House DFL TaxCommittee Chairman Lenczewski today said "We've got a deficit, so let's havesome courage around here and do some bold reform." It's too bad that this bold talk of reform is in the form oftax increases instead of spending cuts.

This Minnesota budget mess reminds me of one of my favoriteold Walter Matthau movies, "A New Leaf". In this hilarious 1970's movie, Matthau plays an eccentric millionaireplayboy who has quickly burned through his entire inheritance. Matthau, with a fiery temper anddistaste for those whom he employs, is confronted with this bad news by hisotherwise meek accountant who tells him repeatedly just how broke he trulyis. It is only after this fieryconfrontation that Matthau is forced to consider his true income alternatives,none of which he finds remotely appealing.

As I reflect on tax day, I feel likeMatthau's accountant in the movie. After years of calmly warning his client to stop his reckless spending,the mild-manner accountant shuts the checkbook, looks his client squarely inthe eye, and begins a rant about his unsustainable level of spending thatfinally hits home. He tells Mr.Matthau that he's broke and that he's had enough. The accountant, after years of abuse in a thanklessemployment situation, quits his job on the spot.